Education Business

A recent survey for a leading insurance company declared that just under half of all businesses fail following a major fire. It is not unreasonable to replace fire with any unexpected crisis; the recent spate of snow is a common reminder that not even the met office can see too far into the future. Contingency planning is therefore a must for all schools in order to survive a crisis and indeed meet personal liabilities to the school and its governors.
    
To ensure an effective business continuity plan, the process must become an integral part of your thinking, tied in to your operational plans, and with all key stakeholders having an involvement in its preparation and review. Any plan, once formulated, must also be regularly updated to ensure it remains relevant. I recall a school calling me following a major flooding incident, concerned that they were unable to alert anyone as the staff and contact details had not been updated for three years!
    
The expectations in schools are now higher than ever, whilst competition in both public and private sectors, and between the two, is fierce. At the same time, we read of disasters on an almost daily basis – from fires and storms to floods, pandemic flu and more recently sabotaged computer systems. Are you prepared for these eventualities? And if not, is the school at risk?

Preparing for the worst
Preparing a plan need not be overwhelming. The first step is to assemble a team. Senior management should be involved, with a project coordinator who is empowered to make decisions and implement them. Involve staff of all levels. Many will have an intimate understanding of the school, and what would be required in the event of a crisis.
    
The actual planning process can take some time, but is relatively straightforward. Consider each activity the school undertakes, and then examine it in detail. Are some time critical? Should some take priority? When a school is involved in many different activities, or is particularly large, you may choose to build plans for different departments or faculties, and then have these feed into one final document.  
    
With each activity there are a few key steps. First, develop a planning aim for each activity, such as a timescale for restoration. Next, determine the minimum steps for your initial response. Plan for restoring communication methods and consider key personnel and equipment, and other information sources. Delegate disaster planning assignments to the staff who carry out the essential activities on a daily basis. Finally, you can incorporate the fine details, focusing on the impact of the interruption, not the cause.

Where to continue teaching
The school site will be high on the agenda. If you have more than one site, then consideration must be given as to whether you could continue functioning, at least in the short term, from your other sites, or are some of your activities based on very specific facilities? If you only have one site, then would it be possible to put temporary accommodation on any playing fields or other free space? Some towns and cities have seen a glut in commercial property, could this be utilised? Even other local schools may be able to help, and it is a given that an agreement will be easier before a crisis than during, on the basis of mutual assistance.
    
Communication is essential, and a part of any good plan is detailed information on key staff, with their contact details, and methods of communicating about any disaster. You will also need information on other important third parties, from trusted contractors to the local press and your suppliers. Indeed, your insurance broker or insurance company is likely to be near the top of your list. But how will you deal with any media pressure? What happens if the event has caused a human disaster, such as a loss of life? Your reputation will be on the line and you will have little time to respond. In recent times, it has become common to also keep the details of a crisis containment consultant, who can hold information about the school and react immediately should an incident occur. Some insurers have started offering this service as a part of the cover, and it is worth checking with your broker if this is the case. The insurance can even cover the cost of their fees and expenses.

The right insurance
You cannot consider how to survive a crisis without considering whether your insurance is adequate.  Business Interruption insurance, otherwise known as consequential loss, is a vital component of a continuity plan and it will be impossible to ensure the cover is correct without a good plan in place. In depth discussion on your Business Interruption insurance would be impossible here, but there are crucial links in to your plan that should be considered. You will have estimated how long it will take you to return the school to its former position before the event. This length of time should be reflected in your cover, and is known as the indemnity period. If you believe the school will not have its full complement of students for say five years and therefore your revenue will be affected for this period of time, your Business Interruption cover will also need to last for five years.
    
The second aspect is what to insure for. Some multi site schools may believe that their revenue will not be affected as they can simply switch sites, some may have specialist departments reliant on specific machinery or other facilities, which can simply not be replicated quickly. Some schools will therefore insure on a full revenue basis, which will then be multiplied over the indemnity period. Other options could be to define the revenue and only insure for those aspects you believe will be affected, for example removing government fees and grants as you continue to educate the pupils, leaving only additional income streams which will cease until the school is rebuilt, or insure only the first element of the revenue, known as ‘first loss’. Finally, you could believe that your revenue will not be affected at all providing alternative and temporary accommodation is provided quickly, and your plan suggests this is possible given your circumstances. In this case you will only need cover for Alternative Expenditure and Increased Costs of Working.
    
With a Business Continuity Plan in place, schools can at least have some certainty for the future; the unexpected does happen more than you think. It helps you to retain and keep your key staff, and to ensure your reputation is not unnecessarily affected by bad news. It also helps you meet governance criteria. A helpful secondary benefit is that any claims costs will be kept to a minimum, and insurers may well allow discounts on your insurance cover for a well thought out business plan. And in this cost conscious age, saving money and reducing insurance costs can only be good news.

This article was written by James Woollam, director of Educational Insurance Services, on behalf of the British Insurance Brokers Association (BIBA). Educational Insurance Services is a member of BIBA.

The British Insurance Brokers Association (BIBA)
The British Insurance Brokers Association (BIBA) is the UK‘s leading general insurance organisation representing the interests of insurance brokers, intermediaries and their customers.
   
BIBA is the voice of the industry, advising members, the regulators, the government, consumer bodies and other stakeholders on key insurance issues. BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards. BIBA works closely with the Chartered Insurance Institute to provide training to those working in the industry and actively participates in helping the industry and its customers deal with some of the major issues of the day.
   
BIBA members provide professional advice to businesses and consumers, playing a key role in identification, measurement, management, control and transfer of risk. They negotiate appropriate insurance protection tailored to individual needs and operate to a very high standard of customer service with the aim of ensuring peace of mind, security, financial protection and the professional advice required.

For more information
Web: www.biba.org.uk